Apple iAd program to monetize iPhone apps with interactive media

Posted:
in iPhone edited January 2014
Tied into iPhone OS 4, Apple's new iAd program will allow developer to include richly interactive ad experiences into their apps and earn a 60% cut of the advertising revenue.



Described as "a new form of mobile advertising designed by Apple to deliver the interaction and emotion currently lacking in the mobile space," iAd is conceived to be a way for users to explore rich content ads right within the app that is presenting it, and without being dumped into a web browser.



How mobile ads are different



"If you look at advertisements on a phone, it's not like on a desktop," Jobs explained. "On a desktop, its about search. On mobile, search hasn't happened. People aren't searching on their phones. People are spending their time in apps."



Jobs was alluding to the fact that Google makes nearly all of its revenues from paid search placement on the desktop, not the more familiar banner ads and AdSense links that are more visible on the web. In mobiles however, there's no real market for paid search because people aren't doing lots of searches. They're involved with apps, and so banner ads is all there is, at least for now.



"Developers [who create free apps] need to find a way to start making their money," Jobs said. "A lot of developers turn to advertising - and we think these current advertisements really suck."



During its presentation of the new ad network, chief executive Steve Jobs noted that when you click on existing iPhone mobile ads, it yanks you out of the application you're running and launches a web ad. This prevents people from clicking on ads more often.



In response, Apple has designed a means for providing interactive and video advertising content without ever leaving the app. Apple will sell and host the ads under a 40/60 split, with app developers getting the larger slice of the ad revenue.



HTML5 content (no Flash)



Jobs said ad content would all be rendered in standard HTML5, and could be developed using any tools the ad agency wanted to use. Ads have access to much of the same APIs as apps, including Location Services and some level of accelerometer access. Asked about the prospects of Flash and Java for iPhone 4, Jobs said, "uh, no."



Apple demonstrated an HTML5 ad for Toy Story 3. The ad allows user to view characters, videos, posters and downloads, play sound clips, and even play a self-contained game within the ad. The user can then leave the interactive ad and return to the app they were previously using.



A second ad example for Air Jordan shoes allows users to build custom shoes, view the history of the product, find a nearby store, and even build a custom dorm room, all within the interactive ad experience.



"We don't know much about this advertising thing." Jobs said during the question and answer period following the event. "We tried to buy a company called AdMob, and Google came in and snatched them because they didn't want us to have them. We bought a smaller but still great company called Quattro."



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Comments

  • Reply 1 of 38
    mstonemstone Posts: 11,510member
    I wonder what ad models will be available pay per click, page views, conversions etc.
  • Reply 2 of 38
    prof. peabodyprof. peabody Posts: 2,860member
    Quote:
    Originally Posted by AppleInsider View Post


    ... "Developers [who create free apps] need to find a way to start making their money," Jobs said. ...



    This quote is priceless.



    Nothing says more about the intentional confusion created between "free" and "free with ads" as this does. I guess the idea that "free" apps might be actually, you know ... free is old fashioned nowadays?



    As is the idea that someone might be making and distributing things for "free" that are actually intended simply as free items?
  • Reply 3 of 38
    adamiigsadamiigs Posts: 355member
    After seeing the Ad demos (granted made by apple just for this purpose) I have to say Apple is bringing Ads to a place that they don't feel like ads anymore, they are small Apps inside of Apps ... this could be very cool. Hey google you watching, oh wait of course you are .
  • Reply 4 of 38
    boogabooga Posts: 1,077member
    Quote:
    Originally Posted by Prof. Peabody View Post


    This quote is priceless.



    Nothing says more about the intentional confusion created between "free" and "free with ads" as this does. I guess the idea that "free" apps might be actually, you know ... free is old fashioned nowadays?



    As is the idea that someone might be making and distributing things for "free" that are actually intended simply as free items?



    I thought of the same thing. I hope Apple provides a tag in the App Store that specifies whether an App is paid-by-ads or really free. I don't really like my kids using ad-supported apps-- I'd rather pay a few bucks or find a worse, free app. But sometimes I don't mind using them myself.
  • Reply 5 of 38
    addaboxaddabox Posts: 12,660member
    Quote:
    Originally Posted by Booga View Post


    I thought of the same thing. I hope Apple provides a tag in the App Store that specifies whether an App is paid-by-ads or really free. I don't really like my kids using ad-supported apps-- I'd rather pay a few bucks or find a worse, free app. But sometimes I don't mind using them myself.



    I dunno. Do websites declare themselves in Google searches as to their ad status? Do magazines have badges on their covers to let you know how many and what kind of ads, if any, you'll have to look at (or page past) to get at the "content"? Do the listings for movies clue me in as to whether the theater will be showing ads prior? It just doesn't seem like this idea is much of a common practice, anywhere, so I'm not sure why we should expect if for phone applications (although, don't get me wrong, I would welcome a heads up).



    The only place where I could see some kind of notification being absolutely necessary would be if the developer is charging for an app and also including advertising, but my guess is such apps would simply be shunned.
  • Reply 6 of 38
    lukaslukas Posts: 11member
    In my opinion iAd is kiiiinda revolutionary.. There are two sides

    On the one side this really is an awesome way to get devs to create and publish more and higher-quality "free" content - which is a good thing! Prices may go down a bit and free Apps won't disappear.

    BUT on the other side I'm worried that an ad popping up every 3 Minutes (and Jobs was actually talking about an ad every 3 minutes!) will ruin the actual user experience, even if the ads are awesome!

    Im curious how they will handle this.
  • Reply 7 of 38
    Quote:
    Originally Posted by AppleInsider View Post


    Jobs said ad content would all be rendered in standard HTML5, and could be developed using any tools the ad agency wanted to use. Ads have access to much of the same APIs as apps, including Location Services and some level of accelerometer access. Asked about the prospects of Flash and Java for iPhone 4, Jobs said, "uh, no."



    There had BETTER be a way we can deny access to personal data to these ads. I want to be able to opt OUT of sending ANYTHING back to the ad companies, even if it is Apple. This includes usage statistics. How and where and why I use an app is NOBODY'S business but mine.
  • Reply 8 of 38
    addaboxaddabox Posts: 12,660member
    Quote:
    Originally Posted by PersonMan View Post


    There had BETTER be a way we can deny access to personal data to these ads. I want to be able to opt OUT of sending ANYTHING back to the ad companies, even if it is Apple. This includes usage statistics. How and where and why I use an app is NOBODY'S business but mine.



    You are aware that every time you use the internet or do a Google search you're sending "usage statistics" whether you want to or not?



    In fact, if you're really worried about this you might consider never using any Google software, because their entire business model is based on collecting and selling such stats.
  • Reply 9 of 38
    eh270eh270 Posts: 60member
    So Apple is an ad agency now? Are they going to offer creative design services? Or do you just submit your creative and fork over cash along with your targeting criteria?
  • Reply 10 of 38
    tiaatiaa Posts: 1member
    I'm unclear as to where these ads will be placed...are they going to be something that just pops up independently or will the user have to trigger them?
  • Reply 11 of 38
    prof. peabodyprof. peabody Posts: 2,860member
    Quote:
    Originally Posted by addabox View Post


    I dunno. Do websites declare themselves in Google searches as to their ad status? Do magazines have badges on their covers to let you know how many and what kind of ads, if any, you'll have to look at (or page past) to get at the "content"? Do the listings for movies clue me in as to whether the theater will be showing ads prior? It just doesn't seem like this idea is much of a common practice, anywhere, so I'm not sure why we should expect if for phone applications (although, don't get me wrong, I would welcome a heads up).



    The only place where I could see some kind of notification being absolutely necessary would be if the developer is charging for an app and also including advertising, but my guess is such apps would simply be shunned.



    I know a lot of folks probably don't agree as it comes down to how in previous generations, advertisements were considered to be not something you want, whereas today, they are more popular than some shows, but ...



    To play devil's advocate to your argument, I would say that the situation with web sites is not the same as no representation is being made there that the content is "free." When you buy an app in the ap store that labelled as "free" it's obviously not the same if it has ads. Whatever one's opinion on ads is and whether you believe it's fair to call such an app "free" or whatever, there is clearly a difference between "free" and "free with ads" so there is somewhat of a misrepresentation going on when they are presented as the same thing.



    There is a difference between the two categories, irrespective of what you think "free" means. Both types of apps are free in the "you pay no money" sense, but only one is also free in the original meaning of being unencumbered or of being a gift to the user.



    You "pay" for the "free with ads" apps by being forced to watch the ads. These apps are not given to you as a gift because of the altruistic intent of the creator of the app, they are loss leaders, hooks, and advertisements for other apps and services. The *intent* of the creators of these kinds of "free apps" couldn't be more diametrically opposed to the intent of the creators of the (real) "free" apps.
  • Reply 12 of 38
    akhomerunakhomerun Posts: 386member
    Quote:
    Originally Posted by eh270 View Post


    So Apple is an ad agency now? Are they going to offer creative design services? Or do you just submit your creative and fork over cash along with your targeting criteria?



    no, they don't offer creative design services. you come to them with an ad and targeting info, and apple hosts it. pretty much like all the other internet advertisers.
  • Reply 13 of 38
    davegeedavegee Posts: 2,765member
    Quote:
    Originally Posted by PersonMan View Post


    There had BETTER be a way we can deny access to personal data to these ads. I want to be able to opt OUT of sending ANYTHING back to the ad companies, even if it is Apple. This includes usage statistics. How and where and why I use an app is NOBODY'S business but mine.



    Good luck with that... lots of existing AD services not run by Apple already know VOLUMES of information about it and unfortunately the quantity AND quality of the data is getting more and more accurate as these smaller ad agencies merge and/or get bought-out .



    It really scary what one lone IP address ... ALL BY ITS LONESOME ... can say about the person and/or family behind it.



    - Where they are ... sure



    - How often they use the web... yep



    - What they search for ... yep



    - What sites they frequent most ... yep



    And thats just the tip of the iceberg...
  • Reply 14 of 38
    curmudgeoncurmudgeon Posts: 483member
    Like dang near everything else in life, the market will decide if in-app advertising will be a success. If the ads get obnoxious, nobody will use the product - regardless of the price. Developers will need to find that compromise that provides enough revenue to support the product but not so much that you drive away your potential buyers.



    I personally think ads suck. I don't want them. Let vendors simply charge for what they think their product is worth. But I don't remember anybody consulting me.



    And to satisfy my own curiosity, can somebody tell me how today's free apps are viable? Everybody states that ads are necessary to keep apps free. Except those ads don't exist today. So how are the vendors handling it? What is the free app business model?
  • Reply 15 of 38
    ilogicilogic Posts: 298member
    Quote:
    Originally Posted by DaveGee View Post


    Good luck with that... lots of existing AD services not run by Apple already know VOLUMES of information about it and unfortunately the quantity AND quality of the data is getting more and more accurate as these smaller ad agencies merge and/or get bought-out .



    It really scary what one lone IP address ... ALL BY ITS LONESOME ... can say about the person and/or family behind it.



    - Where they are ... sure



    - How often they use the web... yep



    - What they search for ... yep



    - What sites they frequent most ... yep



    And thats just the tip of the iceberg...



    Ugh again with this? There is no way to personally identify you!
  • Reply 16 of 38
    cmf2cmf2 Posts: 1,427member
    Quote:
    Originally Posted by Lukas View Post


    In my opinion iAd is kiiiinda revolutionary.. There are two sides

    On the one side this really is an awesome way to get devs to create and publish more and higher-quality "free" content - which is a good thing! Prices may go down a bit and free Apps won't disappear.

    BUT on the other side I'm worried that an ad popping up every 3 Minutes (and Jobs was actually talking about an ad every 3 minutes!) will ruin the actual user experience, even if the ads are awesome!

    Im curious how they will handle this.



    They showed a banner ad. How often do banner ads show up in free apps now? I'm sure it's variable, but I wouldn't be surprised if a lot were faster than every 3 minutes. I don't think that was a rule either, simply an example. You won't be getting a fullscreen ad once every three minutes, that's for sure since there wont be fullscreen ad unless you choose to view one.
  • Reply 17 of 38
    addaboxaddabox Posts: 12,660member
    Quote:
    Originally Posted by Prof. Peabody View Post


    I know a lot of folks probably don't agree as it comes down to how in previous generations, advertisements were considered to be not something you want, whereas today, they are more popular than some shows, but ...



    To play devil's advocate to your argument, I would say that the situation with web sites is not the same as no representation is being made there that the content is "free." When you buy an app in the ap store that labelled as "free" it's obviously not the same if it has ads. Whatever one's opinion on ads is and whether you believe it's fair to call such an app "free" or whatever, there is clearly a difference between "free" and "free with ads" so there is somewhat of a misrepresentation going on when they are presented as the same thing.



    There is a difference between the two categories, irrespective of what you think "free" means. Both types of apps are free in the "you pay no money" sense, but only one is also free in the original meaning of being unencumbered or of being a gift to the user.



    You "pay" for the "free with ads" apps by being forced to watch the ads. These apps are not given to you as a gift because of the altruistic intent of the creator of the app, they are loss leaders, hooks, and advertisements for other apps and services. The *intent* of the creators of these kinds of "free apps" couldn't be more diametrically opposed to the intent of the creators of the (real) "free" apps.



    OK. Interesting ideas about the existential status of "free", but can you point me to any other medium or market wherein this distinction obtains?



    Mind you, I'm not adverse to an argument that apps on a mobile device are a "new thing" that we have yet to fully conceptualize re advertising and and the concept of "free", but it does seem like a kind of onerous burden to expect these apps to declare themselves in a way nothing ever has, immediately.



    My guess is that this will be sorted by the market itself-- "free" apps with unreasonable ad baggage won't be well received, or people will opt for a paid version if they don't like it. After all, free is free at least at the point of transaction, so if it turns out to have ads you can always just delete it and move on, perhaps noting that that particular developer isn't someone that you want to do business with in the future.
  • Reply 18 of 38
    lokheedlokheed Posts: 15member
    Quote:
    Originally Posted by AdamIIGS View Post


    After seeing the Ad demos (granted made by apple just for this purpose) I have to say Apple is bringing Ads to a place that they don't feel like ads anymore, they are small Apps inside of Apps ... this could be very cool. Hey google you watching, oh wait of course you are .



    They don't feel like ads because Apple did them in their meticulous fashion. You think all those 3rd rate ad agencies will care about quality? There is no way they are going to push out "fabulous" ads. It's just another platform that will swipe away precious resources.



    I would have liked to see Apple block ads entirely. If you want to release a free app, do so. If you want money, charge a buck for it. There is nothing worse than releasing a free app littered with ads. And now that behaviour seems sanctioned by Apple.



    I do applaud them for trying to make ads sexy and fit into the iPhone ecosystem, but I think their efforts are misguided...



    With all these ISPs crying fowl and Carriers screaming about data usage, flooding more ads seems counterproductive. Visit Engadget.com with AdBlock on and then off. Ads make up more than half the data downloaded, and don't forget that for those that don't JB, there are no ad blockers for the iPhone webkit. Now apply that model to most of the internet. Ads make money but they cost us all in increased fees, load times, annoyances, etc: http://www.szilveszter.ca/news/2010/...e-advertising/



    smh
  • Reply 19 of 38
    Quote:
    Originally Posted by DaveGee View Post


    It really scary what one lone IP address ... ALL BY ITS LONESOME ... can say about the person and/or family behind it.



    ...



    And thats just the tip of the iceberg...



    That's it. The end of computer use in my home. Slightly used macs for sale.
  • Reply 20 of 38
    I always wondered why the Flash supporters think they could get away with saying that HTML can't provide interactive ad content. It's the retort that is really clutching at straws. Of course HTML can do interactive ads it's always had that ability it's just Flash developers have too great an ego to admit that.



    This ad thing proves that Flash is becoming less and less relevant which can only be a good thing for the Web.
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